Sunday, November 27, 2016

9 Financially Responsible Gifts for Kids

Have you ever walked into a child's playroom?  It seems like they are usually stuffed to the gills with toys.  Many of these toys are ones they no longer use.  How long does it take before the "new" toys become "old" and "unused" ones?  A month?  Two months?  Then the latest and greatest toy joins a pile of clutter.  Well, I don't know about you, but I already have my own clutter, I do NOT need to add to it, nor do I need to add to the clutter of others.  Additionally, what do parents really worry about when it comes to their kids?  Are they deeply concerned that their kids will not have enough toys in life?  Usually not, right?  Parents are worried about their children's futures and about molding them into responsible and happy adults.  Maybe the best gift you can give is one that helps with those things.  So, I've compiled a list of gifts that you can give to children in order to promote financially responsible behavior and financial education.

  1. U.S. Savings Bonds:  I have siblings that are significantly younger than me, and I used to buy them savings bonds.  There were always so many people buying them clothes and toys that I didn't need to, and I lived in a different state and struggled to keep up with their latest likes and dislikes.  The funds can be used for anything, but must be cashed in, so they're unlikely to be used for an impulse buy.
  2. A Piggy Bank:  Filled of course!  This is fun for littler kids.  I remember the child of some dear friends.  She got a piggy bank as a gift, and spent the next several months carrying around her piggy, hitting adults up for change.  whenever someone would give her change she would joyfully announce "It's time to feed the piggy!"  As silly as it may sound, this piggy became like  a toy for her, AND she learned the joy of saving at a very early age!
  3. A Treasure Chest:  If you are the crafty type, you can have a great time making one.  Go to a local craft store (or raid you own craft stash) and look for supplies to make a little "treasure chest."  Go to your local bank or credit union and get a roll of dollar coins.  A full roll is $25, and they're gold in color now.  Crack it open, and dump them into your box.  You can either wrap it up and give it that way or you could get creative create your own treasure map in order to make a game of it.
  4. Money Tree:  My step-mother did this for me as a teen.  She wasn't sure what to get me so she went to a craft store and bought a small, artificial Christmas tree and hung two dollar bills from it.  You can certainly choose your currency and get as fancy or as simplistic with decorations as you would like.
  5. A Savings Account:  There is nothing that says financial responsibility like a good old fashioned savings account, complete with initial deposit!  
  6. A 529 Plan:  It is never too early to start planning for the future, and with rising costs of education, the earlier the better.  A 529 plan is a special investment account that allows you to save for college in a manner that has tax advantages.  If the child in your life doesn't have one, consider being the person to start it.  For more information about 529 plans, read the Question and Answer Section written by the IRS.
  7. A Special Outing:  While this suggestion may seem out of place among these more "financially minded" gifts, the truth is that there is nothing more valuable than time.  Consider some experiences you would like to have with them:  tea parties, skating, sporting event, theatrical event.  The options are as expansive as your imagination.
  8. Cash:  Perhaps this is the least creative item on the list, but this can be accompanied with a conversation about the value of saving.  If this child is older, perhaps they are working toward a car.  If younger, perhaps a bicycle.  Regardless, it is likely there are some big ticket items on their radar, and you can be a part of teaching them about how they can get it.
  9. Stock:  This one sounds a little wild, right?  Buying stock for a kid?  Hear me out.  Pick a company that you KNOW the child has a connection to: a sports fanatic, try NIKE...  Cartoon lover?  Maybe Disney.  You can use this gift as a tool to teach a child about investments.  What does it mean to own a share of a certain company?  When people buy products produced by that company, how does it impact them as shareholders?  I sure wish someone had taught me about stocks when I was little!
Any of these monetary gifts will be best accompanied with a conversation about why you have chosen it.  Maybe it is a conversation about saving our money, or how to budget the amount to spend vs. the amount to save.  Perhaps you talk to the child about investing, or college savings, or about how time together is to be valued above possessions that create clutter and that we don't need.  I could go on and on about which conversations you might pick, but I think you get the point.

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